Farmers fear international trade disruption is new normal

By Farmers Forum Staff

LISTOWEL — Hog farmer Stewart Skinner watched the federal agricultural debates last month at which Liberal Ag Minister Marie Claude Bibeau squared off against the agricultural critics with competing federal parties.
It wasn’t until the sixth question that they got to trade with China. “They spent more time talking raw milk,” Skinner said.

He was not impressed. Ongoing international trade disruptions have been hurting the processing more but farmers are feeling it too, Skinner said. He ponders whether or not trade disruptions will be the new normal.

Hogs are a cyclical industry. But this is different. “People meddling in the market (are) in the way of farmers and the supply chain getting paid what they should be,” Skinner said. “I don’t see this trend going away.”

It’s frustrating, Skinner said. “It made us think we need to be looking at diversification. Whether that means a different product or industry in Canada, or doing the same thing somewhere else, we have to ask some hard questions.

“We’ve seen a liberalized order of trade, that took decades to build, being torn down. It’s really shaped how we look at our future.”

Pork farmers, of course, are not alone. The beef industry got similarly whacked when China declared a moratorium on Canadian meat imports, and the ongoing U.S.-China trade war (and $28 billion in American farm subsidies, with $30 billion more to come) have wreaked havoc on soybean prices.

In a joint statement, the Canadian Meat Council, Canada Pork International, Canadian Pork Council and the Canadian Cattlemen’s Association said the three-month standoff has so far cost Canadian agriculture $100 million.

Beef Farmers of Ontario president Joe Hill, who is also on the board of directors with the Canadian Cattlemen’s Association, said that costs are starting to trickle down to beef producers.

He said Ontario beef farmers have had it tough for a few years and prices are softening even more now because of the trade war between the United States and China. Beef intended for China is now exported to other countries at a lower price. The Canadian Cattlemen’s Association wants the federal government to restore trade with China back to status quo while developing alternative markets, Hill said. “The challenge is all that is going to take a long time.”

The Beef Farmers of Ontario wants the next federal government to start a Beef Cattle Investment and Assistance Program. “Beef farmers have incurred losses of more than $180 per animal since the beginning of January, largely as a result of government action and inaction,” Hill said in a prepared statement. “Collective beef cattle farm losses in the two provinces (Quebec and Ontario) have exceeded $100 million since the start of the year. On the cattle feeding side alone, the industry is losing more than $2.5 million per week on average, which is simply not sustainable. Something needs to be done.”

No one wants to say if the trade issue will last six months or two years but China looks decades ahead. Western democracies often look as far as the next election.

Hill said the BFO is not in the business of telling beef farmers how to run their business, but said for himself, he’s going to start tightening cash flow this fall and winter. The plan is to more closely watch all farm investment and not have any unnecessary expense, such as new farm equipment. He will also be taking on more debt this winter to get through the tough times, but he doesn’t plan on reducing his herd size. “It cost money to have barns less than full,” he said.

The Canadian Cattlemen’s Association says China and Hong Kong is the third-largest export market for Canadian beef. Canada Pork says China was the second-largest exports market by tonnage, and third highest by dollars.
While waiting for a solution, Canada should be looking at other Asian markets such as Vietnam, Thailand, Malaysia and the Philippines, said Ontario Pork chair Eric Schwindt. Then when the Chinese market comes back, there’s more than one Asian market for Canadian pork, said Schwindt.

“We’re afraid this is going to drag on,” he said. “We started out where we were trying to say, ‘don’t panic, be optimistic it will be short term.’ Now our message is, we don’t know how long it can be, so prepare for any eventuality, but keep in mind that the world needs pork.”

Schwindt explained that 25 per cent of the world’s pigs have died in the last 12 months in China due to African Swine Fever. That means the demand is there, and it’s going to get filled.